Universal Life combines permanent life insurance protection with the benefits of tax-advantaged investing.
What is it?
Universal Life is designed to provide protection for a lifetime, and it's flexible. The premiums can vary from year-to-year, and if you choose, you can skip them entirely.
How does it work?
You pay an amount of money, usually monthly, and each month the insurance company takes out a portion of your payment to cover the cost of the insurance and administration. The difference is invested and earns a return based on the investment account(s) you've chosen for your policy.
How does the tax exemption work?
You don't have to pay tax on the growth in your investment accounts, because it's part of a life insurance policy (as long as the policy value doesn't exceed the amount prescribed under the Income Tax Act).
How does the investment and cash value work?
It allows you to withdraw your cash value, or borrow against it at any time. But instead of annual dividends, you earn interest at a fluctuating annual rate.
Contact a Life Insurance Advisor
Please contact us if you are interested in a Life Insurance product or have a question about one of our Life products.